Senegal is located in the western most part of Africa’s Sahel region and has a national territory spanning 196,722 km². Its population is estimated at 13.5 million, 50% of which live in urban zones.
Senegal is one of the most stable countries in Africa, and has considerably strengthened its democratic institutions since its independence in 1960. Senegal has had four presidents: the first, Leopold Sedar Senghor, governed from 1960 to 1980 and handed over power peacefully to Abdou Diouf. In 2000, Senegal witnessed its first democratic transition which resulted in a victorious vote for the Senegalese Democratic Party (PDS) and their candidate Abdoulaye Wade.
In the 2012 elections, former prime minister of Senegal Macky Sall challenged the incumbent President Abdoulaye Wade and won the run-off election with 65.8% of the vote. The 2012 elections were the first to feature two female candidates, and were characterized by a high degree of transparency and universal acceptance of the results.
Senegal aspires to become an emerging country by 2035. However, it has been stuck in a low-growth equilibrium since 2006, and has not shared the rapid growth experienced by many other sub-Saharan African countries over the last decade. Compared to the average growth rate of 6% for the rest of sub-Saharan Africa (SSA), growth in Senegal has averaged only 3.3% since 2006. The country’s gross domestic product (GDP) growth in 2013 was approximately 3% due in part to poor cereal harvests and low production rates in mining and industry. Currently, construction and the services sectors are the main drivers of economic growth.
Economic performance is expected to improve in 2014, with a growth rate of 4.5% thanks to a boost in the secondary sector of the economy and an improved business climate. Nonetheless, low rainfall and the impact of Ebola could reduce predicted gains in growth going forward.
Over the medium term, Senegal is expected to regain economic momentum with the implementation of the Plan Senegal Emergent (Senegal Emergence Plan or PSE). Senegalese authorities have high expectations for growth in the coming years predicting rates of 6.7% in 2015 and 8% by 2017. Significant public investments are anticipated, supported by technical and financial partners who made large contributions at the Paris Consultation Group in February 2014. However, the success of the PSE will also hinge on the growth and implication of Senegal’s private sector. A rigorous program to reform the country’s business climate is already underway.
An underdeveloped investment climate, declining competitiveness, and weak governance systems have prevented the private sector from helping to stimulate the economy. In addition, natural disasters such as droughts and flooding have slowed growth and increased the vulnerability of the entire economy.
In addition, suboptimal management of exports such as peanuts, seafood, and phosphates have also slowed growth. The tourism sector, which has potential to increase revenues, has also been neglected. In order to strengthen the Senegalese economy and increase its resilience to internal and external shocks, more efforts need to be made to better diversify the economy in the areas of horticulture, mining, telecommunications, and manufacturing.
In light of this, the new government has developed an ambitious program that prioritizes diversification and exports. The The Senegal Emergence Plan intends to reverse this downward trend by increasing the productivity of Senegal’s economy in the public and private sectors, both of which are underperforming compared to the past and to its peers.
Poverty remains high and GDP growth remains well below the rates necessary for significant poverty reduction. A continued dependence on remittances to fuel domestic demand and a growing reliance on capital-intensive exports in compensation for faltering labor-intensive sectors results in few new job creation opportunities.
Since 2005, repeated shocks have contributed to reducing per capita income growth to little more than the rate of population growth. A 2011 household survey indicates that poverty has declined by only 1.8 percentage points to 46.7%, and in reality, the number of poor has increased. Inequality in Senegal remains moderate, with the Gini coefficient of inequality estimated at 38; compared to an average of 42 in sub-Saharan Africa. However, geographic disparities remain quite pronounced given the 57% poverty rate in rural areas versus a 26% poverty rate in Senegal’s capital Dakar. A majority of the Millennium Development Goals will not be achieved.
Last Updated: Oct 16, 2014